Are Indebted Farmers Better Farmers?

The recent attack by Tom O’Callaghan in an article on Agriland on an earlier comment piece by me on the direction the dairy industry is heading shows that not much has been learned in some quarters from the boom and bust of recent years. While the actors and sector are different, the tone and content of O’Callaghan’s article reminds me of the kind of bluster we heard in the days of the construction boom, culminating in the ‘they should commit suicide’ advice of a former Taoiseach to those who refused to run with the herd.

Most noteworthy about his article is how hollow it is, with no effort made to discuss and address any of the issues I raised. Instead, and a sure sign that in fact he has no argument to offer, he introduces generalities with which we can all agree (‘Irish dairy farmers deserve respect’ – I never even hinted otherwise), then engages in personal attacks, thus exposing his own limitations and lack of ability to engage and discuss the issues.

Then again that was the purpose of Tom O’Callaghan’s article – drown out real discussion and honest debate, demean anyone who would dare question the ‘experts’.

So let me again lay out my argument, this time in more specific terms.

In Ireland there are approximately 17,000 dairy farmers with an average herd size of 60 cows producing on average 5,000 litres per cow annually. Approximately 30% of this production is based in the Midlands North West constituency and when proposals are put forward to massively increase production into an already oversupplied market and in doing so burden farmers with substantial debt, the question must be asked – is this the best way forward?

Change will come, expansion will happen, that is simple fact. It’s worth noting that when quotas were introduced in 1984 there were nearly four times as many dairy farmers as we have today (approx. 63,000) and there has been a gradual process of consolidation since. What is critical though is that we manage that change to the benefit of the primary producer, not at their expense. These are choppy waters, no doubt about that, but not uncharted waters – we know from the experience of the farming sector in New Zealand that expansion and rationalization can carry huge personal costs for the farming community. This is why we should now be very careful about the direction we take.

Farming and agriculture are the backbone of rural Ireland and is the foundation on which the wider economy is built. Its output is much greater than just the agricultural commodity it produces. The ‘trickle-down effect’ are the buzzwords of the disastrous economic policies pursued worldwide in the last few decades, when we all now know that it was in fact a ‘trickle-up’ effect, more and more wealth concentrated in the hands of a few. Agriculture, however, has always had a true trickle-down influence and the multiplier effect of agriculture is much greater than that of any other industry. It reaches into every town-land in Ireland, often creating economic activity where there is little else. In addition the multifunctional nature of agriculture cuts across many sectors providing the ‘blue’ and ‘green’ public goods from which other sectors benefit.

Dairy-farming has consistently been the most profitable sector in agriculture and its expansion should be carefully planned and implemented in a sustainable manner to ensure its benefits are felt where they are most needed, at local level. It’s important also to note here, prime agricultural land doesn’t have to be confined to just one sector and given the richness of our soil and the advantages of our mild climate, profit can also be made in other sectors.

There are those who see agriculture as a commodity to be exploited to the last degree, with no regard for the primary producer or the broader social context in which the farmer and agriculture operates. To those of this mind-set, the indebted farmer is a better farmer. Why? Because to service those debts, and regardless of his level of profitability, he has no option but to continue to produce. Given the make-up of the farming community and the social norms that are in place, rather than give up and sell their farms, many farmers will spend their lives struggling in personal poverty.

There are individuals and companies who move from place to place, from country to country, exploiting native resources and the efforts of others with no thought of their social responsibility to the wider community – their bottom line is profit, but it will be at our expense. Those individuals and those companies are little better than the ‘carpetbaggers’ of an earlier era.

This topic needs to be fully and honestly discussed as it is of vital importance to Ireland to get the right mix for one of our biggest indigenous industries. There are different options and scenarios which we will return to later.

In the meantime, it would be helpful if contributors to the debate could confine themselves to the facts, refrain from personalising the debate. It would be helpful also if those who are giving leading commentaries would provide details of their professional background so that the public could make up their own mind on any possible underlying motivation.